Penneys says profits will be hit as customers' incomes are squeezed

Fashion giant will limit price hikes next year as customer's incomes will reduce further as inflation worsens

Penneys is contending with worsening costs and increasingly cautious customers who are dealing with an income squeeze.

Penneys owner Associated British Foods warned of lower profits next year, as its fashion brand contends with worsening costs and increasingly cautious customers who are dealing with an income squeeze, sending shares to nearly a decade low.

Penneys, which trades under the name Primark outside Ireland, is one of Europe's biggest fast fashion chains, will limit price hikes next year as parent ABF said it was likely that customer's incomes will reduce further as inflation worsens.